5 Ways To Get Your Start-Up or Side Business Paid on Time (In Singapore)


Ryan Ong



If you’re a freelancer or small business owner, you’ll come across this problem at some point: Singaporeans love to pay late. You can find diseases more willing to part with their host than clients ready to part with your wages. Sure, you could get a court order, but last I checked that takes you off the clients’ favourite persons list. In this article, I explore some possible workarounds:


Contract Of Service and Contract For Service

If you’re freelance or running your own start-up, you need to know this:

A contract of service is not a contract for service.

If someone hires you as an employee, you have a contract of service. Your employer is obliged to pay you within seven days of the stated pay-day on your contract. After that, an e-mail to the Ministry of Manpower will start an investigation.

If you’re freelance, or running a side business, you have a contract for service with clients. You’re not covered by the employment act. If you want to enforce your agreement or contract, you’ll have to drag them to the small claims court yourself.


Judge's Gavel
“Or what, you’re going to enforce it with your tiny hammer?” – Things not to say to judges, #134


Businesses don’t like being investigated, so they’ll make every effort to pay on time. But freelancers get it in the shorts: Clients know you don’t want to jeopardize the relationship by taking them to court. So they’re happy to play Tower Defence (i.e. hold out as long as possible) with your money.

Here are 5 tactics freelancers and small business owners can use:

  • Early Bird Discounts
  • Make Clients Vocalize It
  • Re-work Payment Schemes
  • Progressive Payment
  • Issue Invoices


1. Early Bird Discounts


Many birdhouses on the same tree
“Kiasu and early, obsessed with housing…you imported the birds from Singapore right?”


This is the polite version of “late fees”. To get clients to pay early, give them an apparent discount for timely payment. The advantage of using this compared to late fees is that it doubles as a sales tactic.

Which of the two is more likely to induce a client:

(1) My fee is $1,500. Pay me late and it’s $1,650.

(2) I usually charge $1,650, but if you pay me “early”, it’s only $1,500

If you answered (1), look up the definition of “salesman” in the dictionary; then make it a point to never in your life attempt that job.

I put the “early” in apostrophes because it’s not really early. It’s the usual, designated time for payment. So if you expect to get paid within 30 days, just label 30 days as being “early”.


2. Make Clients Vocalize It


Man writing on whiteboard for clients
We love it; there’s just one problem. It’s this ‘money’ thing…we’d like to not pay any.


Don’t allow clients to quietly slip payment dates into contracts. It’s important to make sure they vocalize it, and more than once.

Damien Tzu, who runs a side-business in antique plates, tells me how he deals with this:

When negotiating, I always bring up the issue of late payment. I explain how, when a previous client paid me late, it caused me a lot of difficulty. Because I want them to voice their opinion, to say they disagree with such things.

Later I will also ask them for the payment date out loud. You must get them to open their mouth and say these things. Then they will hold themselves to it. Don’t just keep quiet and sign papers; no use.”

This is a the old “consistency” trick used by salespeople. Once you can get someone to vocalize a commitment, they will try harder to be consistent with it.


3. Re-Work Payment Schemes


Paying bills
Say $500 now, and the other $10,000 when I win the lottery. Should be any day now.


Sometimes, your client just can’t afford to pay you. Even if you go to the small claims court, and the judge weeps with sheer pathos for your case, there’s no money to be had. The end.

To make the whole experience a more pleasant one (and I say that in the tone of a flight captain who’s announcing an imminent crash), skip the courtroom first. See if you can’t work out an interest based or alternate payment scheme. This is especially helpful if you’re running a side-business: It’s not your main income, so you’re not in a huge rush.

Do this especially if you didn’t get a written contract the first time. Draw up a written agreement of their re-payment scheme; then if they default again, you have ammunition in court.


4. Progressive Payment


Changing laptop battery
There are many steps to changing the battery. Just throw me money as I yell out which one I’m at.


If your side-income involves painting houses or assembling things, you can ask for progressive payment.

Rather than a simple “50% now and 50% later” scheme, you can stagger payment into multiple stages. Andrew Collier, who assembles military dioramas for side-income, says:

There are costs associated with equipment and shipping; I don’t use my own money for it. It’s up to the customer what brands or shipment method he wants. Also, if I mention the overall costs, it can be off-putting, as it can come to $2000 – $6000.

I find it’s better to stagger payment into stages. So I will ask for maybe $500 first, then do the terrain; the river, grass, and so forth. Then another $200 for some structures, and so forth. The advantage is that, even if the customer stops part way, I will still be compensated for work done.”

Staggered payments are ideal for for side-income jobs like interior decoration, model plane assembly, or sign-making. As an added plus, it makes the overall work more affordable to clients.


5. Issue Invoices


Oh, that was my bill? I thought I you sent the Greek bailout request by mistake.


This should be common sense. Whether you’re offering home repairs or computer repairs (Repairing windows or repairing Windows. I couldn’t resist), make sure you have an invoice.

Invoices should state a cost breakdown, along with billing information (who do they make the cheque to?) This is especially true when dealing with business entities; accounts departments hate freelancers who don’t do paperwork.  They will take their time getting back to you.

Likewise, the invoice is invaluable if you end up in court. It stops cheating clients from claiming that: “Oh, that wasn’t the original price we were quoted”.

If you have Microsoft Office, download the invoice templates. They’re free.

Image Credits:
Victor1558, steakpinball, See-ming Lee, Samuel Mann, meddygarnet, quinn.anya, Brett Jordan

Does your side-business or start-up have late-paying clients? Comment and let us know!

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Ryan Ong

I was a freelance writer for over a decade, and covered topics from music to super-contagious foot diseases. I took this job because I believe financial news should be accessible and fun to read. Also, because the assignments don't involve shouting teenagers and debilitating plagues.